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Public Contracts and Higher Resolution Imagery Spur Earth Observation Market

 

October 6, 2011

 

NSR’s Global Satellite-Based Earth Observation, 3rd Edition, released today, indicates that last year the global Earth Observation (EO) market grew by 9% and is set to grow to $10.5 billion by 2020.

 

“Despite uncertainty created by the current budget crisis and financial debt of many countries, and the fact that a privately-funded EO operator recently went bankrupt, EO satellite operators have been growing their revenues lately,” said Claude Rousseau, Senior Analyst for NSR and report author. “With 14 new satellites offering commercial data in the coming three years that are driven by higher resolution imagery demand, sub-meter imagery is set to become the primary source of revenues in the industry, more than doubling in the coming decade” he added.

 

Commoditization of space technologies is also dropping the average price tag of a high-performance satellite to less than $100 million. With the lower price tag and the quicker turn around, private sector companies and countries with developing space programs find entering the EO market a more attractive proposal.

 

Major programs such as the NGA’s EnhancedView or the Global Monitoring for Environment and Security (GMES) of the EU are large contributors to the market revenues, but may also be a target for cuts as their justification could be questioned within larger government spending reduction efforts.

 

Government policies will also play a role in the EO market. Regulations that limit high-resolution data distribution to third parties, policies to freely give away EO data from publicly-funded satellites and export controls of satellite technologies are all actively affecting the EO market.

 

Even if satellite imagery prices have fallen over the past decade, depending on the resolution and type of imagery and the region, data revenues have grown, and these should be even higher than Value-Added Services (VAS) for part of the next decade due to the NGA EnhancedView contract kicking into higher gear when new satellites are launched.